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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| HOUSE RESOLUTION |
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| INTRODUCED BY GEORGE, BISHOP, BOBACK, BRIGGS, COHEN, CONKLIN, D. COSTA, DeWEESE, EVERETT, FREEMAN, GOODMAN, GRUCELA, HANNA, HESS, HORNAMAN, JOSEPHS, LEVDANSKY, MAJOR, McILVAINE SMITH, MUNDY, MURPHY, SANTARSIERO, SIPTROTH, STABACK, VITALI AND YOUNGBLOOD, MAY 26, 2010 |
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| REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY, MAY 26, 2010 |
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| A RESOLUTION |
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1 | Directing the Environmental Resources and Energy Committee of |
2 | the House of Representatives to investigate whether electric |
3 | utilities overcollected or undercollected in stranded cost |
4 | payments under the Electricity Generation Customer Choice and |
5 | Competition Act of 1996 to Pennsylvania ratepayers, including |
6 | industrial manufacturers and the government of the |
7 | Commonwealth, whether refunds in cases of overcollection or |
8 | surcharges in cases of undercollection may be necessary and |
9 | whether those utilities' generation affiliates which received |
10 | formerly regulated generation assets of the utilities at |
11 | little to no cost may have been unjustly enriched in those |
12 | transactions. |
13 | WHEREAS, By enacting 66 Pa.C.S. Ch. 28, known as the |
14 | Electricity Generation Customer Choice and Competition Act, on |
15 | December 3, 1996, the General Assembly sought to resolve certain |
16 | transitional issues in a manner fair to customers, investors, |
17 | electric utilities and their employees, local communities, |
18 | nonutility generators and other affected parties; and |
19 | WHEREAS, The Electricity Generation Customer Choice and |
20 | Competition Act defines "competitive transition charge" as "[a] |
21 | nonbypassable charge applied to the bill of every customer |
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1 | accessing the transmission or distribution network which |
2 | (charge) is designed to recover an electric utility's transition |
3 | or stranded costs as determined by the commission under sections |
4 | 2804 and 2808"; and |
5 | WHEREAS, The act defines "transition or stranded costs," in |
6 | part, as "[an] electric utility's known and measurable net |
7 | electric generation-related costs, determined on a net present |
8 | value basis over the life of the asset or liability as part of |
9 | its restructuring plan, which traditionally would be recoverable |
10 | under a regulated environment but which may not be recoverable |
11 | in a competitive electric generation market and which the |
12 | commission determines will remain following mitigation by the |
13 | electric utility"; and |
14 | WHEREAS, Since the implementation of the Electricity |
15 | Generation Customer Choice and Competition Act, there has not |
16 | been a final analysis by the Pennsylvania Public Utility |
17 | Commission or other governmental entity of the commission- |
18 | approved stranded costs by electric utilities; and |
19 | WHEREAS, In forecasting the future prices of electricity, |
20 | electric utilities may have grossly overestimated the costs that |
21 | may have been stranded under the act; and |
22 | WHEREAS, Electric utilities have been collecting stranded |
23 | cost payments from all classes of ratepayers during the period |
24 | where electric rates were capped based on the projected price of |
25 | electricity; and |
26 | WHEREAS, With the expirations of electric rate caps, a |
27 | complete and certain analysis is both possible and necessary to |
28 | determine whether electric utilities overcollected in stranded |
29 | cost payments from their ratepayers by comparing the projected |
30 | cost of electricity as outlined in the stranded cost agreements |
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1 | with the actual cost of electricity charged to ratepayers; and |
2 | WHEREAS, The Environmental Resources and Energy Committee of |
3 | the House of Representatives desires to investigate whether |
4 | electric utilities overcollected millions or billions of dollars |
5 | in stranded cost payments from Pennsylvania ratepayers and were |
6 | unjustly enriched in doing so and whether their unregulated |
7 | generation affiliates (UGAs) which received formerly regulated |
8 | generation assets at little to no cost from electric utilities |
9 | that grossly undervalued those assets were unjustly enriched in |
10 | those transactions; and |
11 | WHEREAS, In order to effectively investigate and to find the |
12 | answers to the above questions, it is imperative the |
13 | Environmental Resources and Energy Committee has the power to |
14 | obtain testimony and documents; therefore be it |
15 | RESOLVED, That the House of Representatives direct the |
16 | Environmental Resources and Energy Committee to conduct an |
17 | investigation on whether more than $18 billion of stranded costs |
18 | paid by Pennsylvania ratepayers were justified and whether some |
19 | electric utilities and their UGAs, which received formerly |
20 | regulated generation assets of the electric utilities at little |
21 | to no cost, were unjustly enriched in those transactions and |
22 | whether there should be refunds to ratepayers in cases of |
23 | overcollection or surcharges in cases of undercollection; and be |
24 | it further |
25 | RESOLVED, That the committee may hold hearings and conduct |
26 | investigations at such places as necessary in this Commonwealth; |
27 | and be it further |
28 | RESOLVED, That it may issue subpoenas under the hand and seal |
29 | of its chairman commanding any person to appear before the |
30 | committee and to testify on matters relevant to the committee's |
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1 | inquiries and to produce such books, papers, records and |
2 | documents as the committee deems necessary; and be it further |
3 | RESOLVED, That any person who neglects or refuses to testify |
4 | or to produce any books, papers, records or documents may be |
5 | subject to the penalties provided by the laws of this |
6 | Commonwealth in such case, and each member of the committee |
7 | shall have power to administer oaths and affirmations to |
8 | witnesses appearing before the committee; and be it further |
9 | RESOLVED, That the committee make a report of its |
10 | investigation and recommendations to the House of |
11 | Representatives by September 15, 2010. |
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